Dump the Dollar, China State TV Tells ViewersChinese lunchtime television on Friday gave ordinary people a basic tip on how to play the currency markets: sell the dollar!

A state news program, quoting unnamed "wealth management experts," told residents with dollar accounts on the mainland to convert their holdings into yuan or a range of other foreign currencies, including the pound and the euro.

The prospect of ordinary Chinese ditching the dollar should be less alarming than reports that have roiled global markets of Beijing diversifying its official foreign exchange reserves.

Whereas China's official reserves of more than $1.4 trillion are the world's biggest, private foreign currency deposits in China are a fraction that size: $162.1 billion at the end of October, according to People's Bank of China.

The central bank did not give a currency breakdown of these deposits.

Three Solutions to Dollar Weakness

The state news program, which did not quote any government official, said people were getting squeezed because the pace of yuan appreciation against the dollar was greater than the interest rate earned domestically on dollar accounts.

Analysts expect the yuan to rise anywhere from 5 to 7 percent annually against the dollar, while domestic dollar accounts earn depositors just 3 percent a year.

The program proposed three solutions.

"Selling dollar for yuan as soon as possible may be a safe approach," the news program said, adding the yuan could then be used to invest in domestic mutual funds.

"Secondly, you can change the dollar into strengthening currencies," it continued. .....(more)

The shoddy, poisonous goods the Chinese are dumping here are likely to hurt demand. If we quit buying their trash it would throw 200,000,000 chinese out of work. Besides which, the devaluation has probably been overdone. Now is not a good time to be short the greenback.

I can just let you know that you can invest in funds like the Franklin Hard Currency Fund which invests in Euros and Currencies that tend to rise when the dollar falls.

You can also visit an online bank like Everbank (I think that is what it is called) and pay U.S. Dollars to invest in a wide array of foreign currencies, including the Yen, Chinese Yuan, Canadian currency or any currency that you wish. I would do some research before investing in the Japanese Yen. Or maybe you know something of interest to others about the status of the Yen?

There are certainly ways to buy the coins or buy certificates for coins, but you usually have to pay for storage fees and premiums.

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